Tallgrass Energy based in Leawood, Kansas is paying $440 million for part of the Rockies Express Pipeline company. The purchase is being made by Tallgrass Development’s wholly owned subsidiary, Rockies Express Holdings, LLC. The firm is acquiring Sempra’s 25 percent membership in the pipeline and the deal has been approved by the boards of both Tallgrass and Sempra and is subject to closing conditions.
The deal will reduce Sempra’s membership in the pipeline to 16 2/3 percent and the acquisition is to be closed in the second quarter of 2016. Tallgrass already owns 50 percent of the 1,712 mile natural gas pipeline that extends from Opal, Wyoming and Meeker, Colorado to Clarington, Ohio. It is considered to be one of the largest natural gas pipelines ever built in North America.
However, one provision in the deal would allow a subsidiary of Phillips 66 that holds 25 percent interest in the pipeline, to purchase its proportionate share of Sempra’s 25 percent interest being sold to Sempra. If that were to happen, it would reduce the membership interested acquired by Tallgrass from Sempra to 26.6 percent.
